BusinessMicrofinance Sector Shows Early Recovery Despite Legacy Loan Challenges
The microfinance sector is showing early signs of recovery after two years of stress, with improved repayment performance in FY26 and tighter credit controls reducing high-risk multiple borrowing. However, the loan book has shrunk and legacy bad loans have worsened. Sa-Dhan warns the recovery remains fragile due to below-normal rainfall and renewed inflation pressures.
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